Israeli Foreign Minister Tzipi Livni has requested early elections after failing to bring together a new coalition government.
Livni was was handed the task of forming a new administration following the resignation of Prime Minister Ehud Olmert, who faces corruption charges.
The election will pitt Livni against former prime minister Benjamin Netanyahu and the Likud Party, who lead in the polls and are hostile to current peace plans.
A spokesperson for Palestinian President Mahmoud Abbas said an early election would put the peace process “on hold for half a year at least”.
A Hamas official, based in Gaza, agreed.
“ Despite the fact that we reject negotiations, from a political standpoint, we can say that an early election will have a negative effect. Because the negotiation process will be halted until new elections are held and a new government is formed,” he said.
It is a huge blow for the White House as an early Israeli general election has effectively killed the slim chance of a peace agreement before US President George Bush leaves office in January.
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